Backgrounder - A New Approach to Fiscal Arrangements with Aboriginal Self-Government

The Government of Canada is committed to ensuring that modern treaties and self-government agreements continue to be a foundation for strengthened and renewed relationships with Aboriginal peoples and believes that the effective implementation of self-government is an essential component of success for Aboriginal groups. Fostering effective and accountable First Nation and Inuit governments promotes healthy communities, increases investor confidence and supports economic partnerships.

Canada approaches fiscal arrangements with self-governing Aboriginal groups by holding periodic negotiations concerning funding renewals with each individual group. These negotiations can, at times, be time-consuming and costly for all parties.

With the prospect of more treaties and self-government agreements being reached across Canada, the Government of Canada believes that many issues can be addressed by a new approach to fiscal arrangements.

This new approach will help to ensure the benefits of self-government are fully realized by bringing greater consistency, timeliness, transparency and fairness to the process of implementing fiscal agreements with Aboriginal governments. It will also help self-governing groups deliver services to their citizens in areas such as education and land management.

While the work on a new approach is in its early stages, general features of this approach would include:

  • a published federal policy, clearly articulating the parameters for Canada’s fiscal support of self-governing Aboriginal groups;

  • a transparent funding formula that takes into account each government's capacity to generate own-source revenues;

  • an advisory process or forum for representatives from Aboriginal governments, provinces, territories and the federal government to meet collectively and discuss fiscal arrangements;

  • new measures that take into account the unique circumstances of each self-governing group; and

  • accountability provisions to ensure financing arrangements are open and transparent.

As part of developing the new approach, Aboriginal Affairs and Northern Development Canada (AANDC) committed to engage with Aboriginal governments and groups negotiating self-government, as well as provincial and territorial governments. Between 2011 and 2012 two rounds of engagement were completed. These meetings provided a productive exchange of views on the issues and principles related to fiscal arrangements and AANDC proposals for a new approach.